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Like most Small Island Developing States (SIDS), Vanuatu bears little responsibility for climate change, but is particularly vulnerable to climate change impacts due to its geographical, socioeconomic and climate profiles.
Vanuatu remains poorly funded, and approved finance fulfils only a small part of actual needs. Major sources of funding include the Global Environment Facility (GEF), the Adaptation Fund, the Green Climate Fund, and bilateral sources of funding. It is expected that there will be an increase in climate investment in part due to new funding mechanisms such as the Green Climate Fund.
A study carried out by the Stockholm Environment Institute revealed that Vanuatu had received roughly USD 49.4 million from 2010-2014. The majority of this funding (57.2%) supported mitigation activities, a smaller percentage (39.9%) supported adaptation activities, while the rest (2.9%) targeted both simultaneously. The study can be accessed here.
Vanuatu currently faces several challenges in regards to mobilizing climate finance:
1. Access to climate finance is difficult because the different requirements of different sources are complex and cause duplication of efforts.
2. Coordination of climate finance is also challenging due to the proliferation of climate finance mechanisms and evolving governance structures.
3. Making detailed climate finance investment plans is still challenging, as Vanuatu does not yet have a concrete climate investment pipeline. This is due in part to a lack of predictability of finance from various sources.
The United Nations Framework Convention on Climate Change (UNFCCC), The Paris Agreement and the Kyoto Protocol require that developed country Parties (Annex II Parties) shall provide financial resources to assist developing country Parties in implementing the Convention. To facilitate this, the Convention has established various financial mechanisms to provide funds to developing country Parties.
A Standing Committee on Finance was established under the UNFCCC to assist the COP in meeting objectives of the Financial Mechanism of the Convention. Although not a fund in itself, the Standing Committee on Finance has been tasked with, among other things, preparing a biennial assessment of climate finance flows. The operation of the Financial Mechanism is entrusted to one or more existing international entities. The operation of the Financial Mechanism is partly entrusted to the Global Environment Facility (GEF).
In addition to providing guidance to the GEF, Parties have established special funds, including: the Special Climate Change Fund (SCCF), the Least Developed Countries Fund (LDCF), the Adaptation Fund (AF), and the Green Climate Fund (GCF).
Article 9 of the Paris Agreement stipulates that developed country Parties shall provide financial resources to assist developing country Parties with respect to both mitigation and adaptation. Other Parties are encouraged to provide or continue to provide such support voluntarily.
The Paris Agreement makes reference to a global goal of at least USD 100 billion per year to be mobilized from public and private sources by 2020.
The national government has prioritised increased access to climate finance on its Climate Change and Disaster Risk Reduction Policy as well as the National Sustainable Development Plan.
The Ministry of Climate Change has highlighted the importance of increasing access to climate finance nationwide through the Climate Finance Roadmap and high-level climate finance-related meetings and consultations such as the 2016 National Climate Finance Forum.
These documents steer the climate change and disaster-related work being carried out nationwide.